The sanctions imposed on Russia for invading Ukraine resulted in many luxury brands suspending retail activities in Russia. The exit of these luxury brands and a falling ruble led to panic buying of these luxury goods among wealthy Russians, in the hopes of higher resale value in the future. While affluent Russians are avid buyers of luxury items, their share of total luxury sales is minimal in comparison to the industry's two primary consumers, the US and China.
The recent addition to the list of brands that have ceased their operations in Russia is mentioned below:
Luxury Brands to Exit Russia
Hermès, the luxury brand known for its Berkin bags, was one of the first major luxury brands to announce the suspension of activities in Russia. Hermès will pause commercial activities from the evening of March 4, 2022.
Chanel, the luxury brand known for its Haute couture runway, had earlier announced a donation to relief organizations and the UNHCR-UN Refugee Agency. But on March 7, 2022, the luxury brand announced that it already suspended e-commerce activities in Russia and would pause its business and close its boutiques in Russia.
Kering, a French multinational corporation that owns brands such as Gucci, Saint Laurent, Bottega and Veneta announced that Kering and its houses will close their directly operated stores in Russia.
Richemont is a Swiss luxury goods holding company whose brand portfolio includes Piaget, Montblanc, and Van Cleef & Arpels. The company stopped commercial activities in Ukraine on February 24, 2022, and in Russia on March 3, 2022.
LVMH markets products under Louis Vuitton, Christian Dior, Guerlain, Givenchy, Kenzo, Celine, and other brand names. The French luxury giant has about 120 stores and around 3,500 employees in Russia. LVMH announced that it would cease operations in Russia on March 4, 2022, but continue to pay salaries and benefits to its employees.
Prada, a luxury fashion house, following the announcements from other luxury brands, made a similar announcement suspending retail operations in Russia.
Swatch Group is a Swiss company that markets its products under Breguet, Harry Winston, Blancpain, Glashutte Original, JaquetDroz, and other brand names. In the first week of March, the Swiss luxury watchmaker announced that it would continue its retail operations in Russia. However, it revealed in the consecutive week that it would also suspend activities in Russia owing to the difficulty in operating in Russia but would retain its staff in the country.
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